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**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**FORM
        10-QSB**







**x QUARTERLY
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF**


**THE
      SECURITIES EXCHANGE ACT OF 1934**


For
      the
      quarterly period ended January 31, 2006





**o TRANSITION
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF**


**THE
      SECURITIES EXCHANGE ACT**


For
      the
      transition period from _____________ to _____________





Commission
      file number: 000-27667





**METALLINE
      MINING COMPANY**


(Exact
      name of small business issuer as specified in its charter)





Nevada
            91-1766677(State
                or other jurisdiction of incorporation or organization)
            (IRS
                Employer Identification No.)








1330
      E.
      Margaret Ave.


Coeur
      d'Alene, ID 83815


(Address
      of principal executive offices)





Issuer's
      telephone number, including area code: (208) 665-2002








Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter period that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days.
      Yes x    No
o


Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o    No
x





There
      were 27,481,085 shares of the issuer's common stock, par value $0.01,
      outstanding as of February 1, 2006.





Transitional
      Small Business Disclosure Format (check one): Yes o    No
x







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**METALLINE
      MINING COMPANY QUARTERLY REPORT**


**ON
      FORM 10-QSB FOR THE QUARTERLY PERIOD**


**ENDED
      JANUARY 31, 2006**





**TABLE
      OF CONTENTS**


PagePART
                I - FINANCIAL INFORMATIONItem
                1:
            Financial
                Statements
            1Item
                2:
            Management's
                Discussion and Analysis of Financial Condition
                and Results of Operations
            1Item
                3:
            Controls
                and Procedures
            9PART
                II - OTHER INFORMATIONItem
                1:
            Legal
                Proceedings
            10Item
                2:
            Unregistered
                Sales of Equity Securities and Use of
                Proceeds
            10Item
                3:
            Defaults
                upon Senior Securities
            10Item
                4:
            Submission
                of Matters to a Vote of Security
                Holders
            10Item
                5:
            Other
                Information
            10Item
                6:
            Exhibits
            10Signatures
            
            11








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            Statements**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
              1.**
            **Financial
                Statements.**





The
      reviewed consolidated financial statements of Metalline Mining Company (the
      "Company"), for the period covered by this report, are included elsewhere in
      this report, beginning at page F/S-1.





The
      reviewed consolidated financial statements have been prepared in accordance
      with
      generally accepted accounting principles for the interim financial information
      with the instructions to Form 10-QSB and Rule 10-01 of Regulation S-X.
      Accordingly, they do not include all of the information and footnotes required
      by generally accepted accounting principles for complete financial statements.
      In the opinion of the Company's management, all adjustments (consisting of
      only
      normal accruals) considered necessary for a fair presentation have been
      included. Operating results for the three-month period ended January 31, 2006
      are not necessarily indicative of the results that may be expected for the
      full
      year ending October 31, 2006.





For
      further information refer to the financial statements and footnotes thereto
      in
      the Company's Annual Report on Form 10-KSB for the year ended October 31, 2005
      incorporated by reference herein.





**ITEM
              2.**
            **Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations.**




*Forward-Looking
      Statements*





This
      Quarterly Report on Form 10-QSB, including Management's Discussion and Analysis
      of Financial Condition and Results of Operations, contains forward-looking
      statements regarding future events and the Company's future results that are
      subject to the safe harbors created under the Securities Act of 1933 (the
      "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").
      These statements are based on current expectations, estimates, forecasts, and
      projections about the industry in which the Company operates and the beliefs
      and
      assumptions of the Company's management. Words such as "expects," "anticipates,"
      "targets," "goals," "projects," "intends," "plans," "believes," "seeks,"
      "estimates," "continues," "may," variations of such words, and similar
      expressions are intended to identify such forward-looking statements. In
      addition, any statements that refer to projections of the Company's future
      financial performance, the Company's anticipated growth and potentials in its
      business, and other characterizations of future events or circumstances are
      forward-looking statements. Readers are cautioned that these forward-looking
      statements are only predictions and are subject to risks, uncertainties, and
      assumptions that are difficult to predict, including those identified elsewhere
      herein and in the Company's Annual Report on Form 10-KSB for the fiscal year
      ended October 31, 2005 under "Risk Factors." Therefore, actual results may
      differ materially and adversely from those expressed in any forward-looking
      statements. The Company undertakes no obligation to revise or update any
      forward-looking statements for any reason.




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*Overview*




The
      Company is an exploration stage enterprise formed under the laws of the state
      of
      Nevada on August 20, 1993, to engage in the business of mining. The Company
      currently owns eight concessions that are located in the municipality of Sierra
      Mojada, Coahuila, Mexico. The Company's objective is to define sufficient
      mineral reserves on these concessions to justify the development of a mechanized
      mining operation (the "Project"). The Company conducts its operations in Mexico
      through its wholly owned Mexican subsidiary, Minera Metalin S.A. de C.V.
      The **** Company
      currently has a total of five employees, including four full-time
      employees.




The
      eight
      concessions total 7,108 hectares (17,563 acres). The Company owns 100% of the
      eight concessions pursuant to purchase agreements with the previous owners.
      A
      number of prior established concessions that are not owned by the Company are
      located within the largest concession, the Sierra Mojada concession. The Company
      holds title to the concessions that it owns subject to its obligation to
      maintain the concessions by conducting work on the concessions, recording
      evidence of the work with the Mexican Ministry of Mines and paying a semi-annual
      fee to the Mexican government.




Ownership
      of a concession provides the owner with exclusive exploration and exploitation
      rights of all minerals located on the concessions, but does not include the
      surface rights to the real property. Therefore, the Company will need to
      negotiate the necessary agreements, as needed, with the appropriate surface
      landowners if the Company determines that a mining operation is feasible for
      the
      concessions. The Company currently anticipates that it will build mining
      infrastructure needed on land owned by the local municipality. Initial
      communications with the municipality officials indicate that they will be
      willing to negotiate the necessary agreements.




The
      concessions are located within a mining district known as the Sierra Mojada
      District (the "District"). The District is located in the west central part
      of
      the state of Coahuila, Mexico, near the Coahuila-Chihuahua state border
      approximately 200 kilometers south of the Big Bend of the Rio Grande River.
      See
      Exhibit 99.1 attached hereto and incorporated herein by reference for a map
      showing the location of the mine. The principal mining area extends for some
      5
      kilometers in an east-west direction along the base of the precipitous, 1,000
      meter high, Sierra Mojada Range. The District has high voltage electric power
      supplied by the national power company, Comision Federal de Electricidad, C.F.E.
      and is supplied water by the municipality of Sierra Mojada. The District is
      accessible from Torreon by vehicle via 250 kilometers of paved road. There
      is a
      well maintained, 1100 meter, gravel airstrip in the District as well as a
      railroad connecting with the National Railway at Escalon and Monclova.




Over
      45
      mines have produced ore from underground workings throughout the approximately
      five kilometer by two kilometer area that comprises the District. The Company
      estimates that since its discovery in 1879, the District has produced about
      10
      million tons of high grade ore that was shipped directly to smelters. The
      District has never had a mill to concentrate ore and all mining conducted thus
      far has been limited to selectively mined ore of sufficient grade to direct
      ship
      to smelters. The Company believes that mill grade mineralization that was not
      mined remains available for extraction. The Company anticipates exploring and
      potentially developing the mill grade mineralization and the unexplored portions
      of the concessions.




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The
      concessions contain two distinct mineral systems separated by the Sierra Mojada
      fault which trends east-west along the base of the range. North of the fault
      mineralization is composed of silver, copper, zinc, lead sulfide and oxide
      minerals. South of the fault the mineralization is oxide zinc and oxide lead
      minerals.




The
      sediments in the District are predominantly limestone and dolomite with some
      conglomerate, sandstone and shale and the bedding attitudes are near horizontal.
      The mines are dry and the rocks are competent. The thickness and attitude of
      the
      mineralized material is amenable to high volume mechanized mining methods and
      low cost production.




Mining
      operations are typically developed in phases. These phases include: 1) exploring
      to identify available mineral deposits and define a resource; 2) conducting
      a
      feasibility study to determine whether deposits may be profitably extracted;
      and
      3) eventually developing mining operations. The Company has already conducted
      extensive exploration and identification of the mineralization located on the
      concessions. The Company has also initiated a feasibility study. If the results
      of the feasibility study are positive and the Company is able to secure
      sufficient financing, then the Company would proceed to the development stage,
      leading eventually to the operation of a mine on the concessions.





Thus
      far,
      the Company has spent a total of approximately $13.2 million during the
      exploration phase and continues to maintain a sampling and drilling program
      that
      is budgeted at approximately $50,000 per month, not including analytical costs
      which can vary from $20,000 to $40,000 per month. The Company estimates that
      completion of a feasibility study will cost approximately $5 million and the
      Company expects that it will take approximately 12 months to complete. Following
      the completion of a successful feasibility study, the Company would then proceed
      to the construction phase, which would entail construction of a mine and related
      infrastructure pursuant to a mine plan developed specifically for the Company's
      concessions, and construction of an extraction plant to extract metal from
      the
      ore that would be mined.





Much
      of
      the infrastructure required for a mine, including access to roads, electricity
      and rail lines, is already in place due to the historical mining operations
      conducted in the District. Results from mapping, sampling, drilling and
      inspection of existing workings indicate that large mineralized resources can
      be
      developed within and adjacent to the existing workings and in unexplored
      stratigraphic units outside of and below the existing mine workings. The Company
      anticipates that it would also build additional infrastructure, including mine
      access, a tailings pond and an extraction plant. The Company would also enter
      into agreements with the landowners of the concessions' surface rights upon
      completion of a feasibility study and finalization of a mine plan for the
      Project. The Company estimates that construction of a mine and extraction plant
      would cost approximately $400 million and take approximately 2 to 3 years to
      complete. The Company intends to finance this cost with a combination of equity
      and debt. In addition the Company may seek joint venture partners or other
      alternative financing sources as necessary to complete development of the
      Project.





A
      description of work completed in the exploration phase and initiated in the
      feasibility phase follows:




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In
      1997
      the Company initiated exploration of the concessions by collecting and analyzing
      historical data from previous mining operations, surveying the locations of
      the
      mines, geological mapping, and sampling of the surface and some of the existing
      mines. Based on the information gained from this work, the Company has been
      exploring the tabular, nearly horizontal bodies of mineralized material located
      on the concessions that are known as mantos.




Exploration
      from 1997 to 1999 concentrated on the polymetallic copper, silver, zinc, lead
      mineralization north of the Sierra Mojada Fault. The Veta Rica, Once, San Jose
      and other mines located in the western part of the district were mapped and
      channel sampled. In the eastern part of the District in the Encantada and
      Fronteriza mines, the copper, silver, zinc, lead mineralization, known as the
      Polymetallic Manto, has been mapped, channel sampled and drilled.




Work
      on
      the polymetallic mineralization was put on standby in 1999 when the Company
      recognized the potential of the oxide zinc mineralization as a result of a
      positive feasibility study conducted on the Skorpion Mine located in Namibia,
      Africa, that demonstrated that the use of the solvent extraction electrowinning
      ("SXEW") process could make it profitable to mine oxide zinc deposits that
      would
      otherwise be unfeasible. Now that the Company's work on the oxide zinc
      mineralization is in the feasibility study stage, the Company anticipates
      continued exploration of the polymetallic mineral system north of the Sierra
      Mojada Fault. However, the Company has not yet allocated financial resources
      nor
      established a timeline for when it expects to initiate such additional
      exploration.




The
      Company initiated a diamond drill program in January 2004, and drilled over
      30,000 meters in 2004 and 2005. In addition, over 9,000 meters of percussion
      drill and over 12,000 meters of channel samples of the oxide zinc mineralization
      in the San Salvador, Encantada and Fronteriza Mines has been completed by the
      Company and its joint venture partners. This work has defined a body of oxide
      zinc mineralization extending 1,500 meters in an east-west direction, 100 to
      200
      meters in a north-south direction, and 20 to 100 meters vertically. The Company
      intends to continue the drill program into the Esmeralda Mine, the next mine
      to
      the west of the San Salvador Mine, to further define the extent of the Iron
      Oxide Manto and the Smithsonite Manto.




Prior
      mining of oxide zinc mineralization has occurred intermittently over a distance
      in excess of 5 kilometers from the Oriental Mine located in the east end of
      the
      District to the Vasquez Tres Mine located in the west end of the District.
      Holes
      drilled 2,000 meters west of the San Salvador Mine intersected oxide zinc
      mineralization that is up to 140 meters (460 feet) thick and 10 meters (33
      feet)
      below the surface. Drilling has also intersected oxide zinc mineralization
      intermittently over the 2,000 meters between the Fronteriza Mine and the
      Oriental Mine.




In
      2004,
      the Company retained Reserva International, LLC, an independent contractor
      specializing in resource evaluation, to generate a block model evaluation based
      upon the data compiled from the Company's and its joint venture partner's
      accumulated database to determine the size and grade of the mineralization
      of
      the Iron Oxide Manto and the Smithsonite Manto. Based on the estimates generated
      from the block model evaluation, the Company has determined that the estimated
      mineralization justifies a feasibility study of the Iron Oxide
      Manto.




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Although
      the Company is of the opinion that sufficient mineralized material has been
      defined to justify construction of a mine, extraction plant and refinery, the
      Company still must complete a feasibility study to determine whether a mining
      operation may be profitably conducted. This study will consist of a detailed
      engineering and economic valuation of the Iron Oxide Manto mineralized material
      to determine the viability and profitability of the potential operation.




The
      Company initiated the feasibility study in 2004, retaining Green Team
      Consultants International cc ("GTI"), of Johannesburg, South Africa. GTI was
      selected, in part, due to GTI's experience conducting the feasibility study
      for
      the Skorpion Mine in Namibia, Africa. GTI supervised the design, construction,
      and training of the Skorpion Zinc personnel and operated the mine and extraction
      plant through initial production and until the mine and plant were at 90% of
      capacity, at which point operation of the mine and plant was turned over to
      Skorpion Zinc, a subsidiary of Anglo American Corporation PLC.





The
      Skorpion Mine is the first, and to date only, mine in the world using the SXEW
      process for extracting zinc from oxide zinc ore and produces a refined product,
      Super High Grade ("SHG") zinc which is 99.995% zinc. SXEW is a
      hydrometallurgical process that has about a 30% lower cost for extracting zinc
      than the pyrometallurgical process used at smelters by essentially all other
      mining operations around the world. The Company anticipates that using the
      SXEW
      process will enable the Company to extract zinc more efficiently and
      economically than its competitors.





GTI,
      as
      general contractor for the feasibility study, has retained TWP Consulting (pty)
      Ltd. ("TWP") to prepare the mine plan as part of the feasibility study for
      the
      Project. TWP is a large South African mining consulting company that has worked
      on large mining projects in South Africa and internationally, including the
      mine
      plan at the Skorpion Mine.





GTI
      has
      also retained SRK Consulting ("SRK") as the auditing engineering firm for the
      feasibility study. SRK is a world-wide engineering consulting company that
      was
      the auditing engineering firm for the feasibility study of the Skorpion Mine.





Principals
      of GTI, TWP and SRK have completed a tour and examination of the Sierra Mojada
      property, reviewed the project data, conducted underground examination of the
      Iron Oxide, Smithsonite and Polymetallic Mantos, and selected surface locations
      for the mine and extraction plant facilities.





GTI
      has
      also retained Min-Tek, a South African consulting company specializing in
      mineral and metallurgical research and development, to complete the
      metallurgical work for the Project. Min-Tek was chosen, in part, because it
      performed the metallurgical work for the Skorpion feasibility
      studies.




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On
      July
      12, 2005, the Company released the results of Mint-Tek's metallurgical test
      work. The test work focused on demonstrating the viability of using a
      combination of dense media separation ("DMS") and flotation processes to
      successfully produce a zinc oxide concentrate from a variety of samples taken
      from the Sierra Mojada mineralization. The report included a conceptual block
      flow diagram showing the key DMS and flotation steps followed by conventional
      zinc refining using leach, solvent extraction and electrowinning. The Company
      believes that the ability to produce a concentrate which can be shipped
      economically would be a major contributing factor to the potential success
      of
      the Project because it would allow the Company to choose the best site for
      a
      refinery based upon the tax regime, cost of power and other capital and
      operating cost inputs available at various locations. In addition, the report
      noted that acid-consuming mineral such as limestone and dolomite would be
      discarded in the concentration process, which would reduce sulphuric acid
      consumption in the refinery process.





Min-Tek's
      test work of the Sierra Mojada samples indicated that a zinc oxide concentrate
      with a zinc content of 30% can be produced at an overall concentrator zinc
      recovery of 75%-80%. The concentrate produced responded well to atmospheric
      leaching with dilute sulphuric acid, and refinery leach extraction efficiency
      was above 98%. The concentrator operating cost is expected to be approximately
      $5-$8 per ton of ore treated, which is offset by the expectation that the
      sulphuric acid consumption in the refinery leach step will be 70% less than
      that
      achievable with direct leaching of the ore.





The
      Company expects to continue to optimize the concentrating process route by
      conducting further test work to confirm key aspects of the flowsheet and to
      enhance overall recovery and concentrate grade. In particular, the incorporation
      of cleaner and scavenger steps in the flotation circuit and the potential to
      recover zinc from slimes produced in the process (currently considered to be
      discarded) provides further upside potential.





Feasibility
      study work continues to determine the mining method and its related costs and
      to
      determine the production rate. Drilling continues to explore the Iron Oxide
      Manto mineralization to the west in the San Salvador and La Esmeralda mines.
      In
      addition, surveying, mapping and channel sampling is being conducted in the
      La
      Esmeralda mine to determine the location of historic workings. No historic
      data
      is available for the La Esmeralda mine, which produced ore from the Lead Manto
      south of the Sierra Mojada Fault and the copper, silver, polymetallic
      mineralization north of the Sierra Mojada Fault. The Company expects that the
      decline to access the Iron Oxide Manto mineralization will enter through ground
      upon which La Esmeralda is located, and the location of the existing workings
      must be determined as part of the mine plan for the feasibility study. Channel
      samples in these workings have been collected and have produced a few thousand
      samples of mineralized material, which consist of north side copper-silver
      mineralization and south side oxide zinc mineralization. Lead Manto stopes,
      which overlie the Iron Oxide Manto, have been located and are also being
      surveyed and sampled. These samples have been prepared for assay and results
      will be announced when available.





On
      March
      6, 2006, Metalline closed its private placement as announced in its news release
      of March 6, 2006 and Form 8-K filed March 6, 2006. Placement funds totaled
      $11,156,509 and 13,945,638 shares were issued and 13,945,638 warrants were
      issued with a price of $1.25 and a term of five years.




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The
      Company has had a mining operation in the Smithsonite Manto that has been
      shipping zinc carbonate ore to Cameron Chemical Company, for use as a
      micronutrient for the fertilizer industry. During the period ended January
      31,
      2006, the Company realized other income from the sale of zinc carbonate ore.
      The
      Company has ceased mining zinc carbonate ore, but anticipates continued sales
      from the existing inventory of mined ore until the inventory is
      depleted.





The
      Company's corporate offices are located at 1330 East Margaret Avenue, Coeur
      d'Alene, Idaho 83815, and its telephone number is (208) 665-2002 and FAX is
      (208) 665-0041. The Company's facilities in Mexico include offices, residences,
      shops, warehouse buildings and mining equipment located at Calle Maria #1,
      La
      Esmeralda, Coahuila, Mexico. The Company's telephone and FAX number in Mexico
      is
      52 872 761 5129. Electric power has been upgraded to 13,200 volts and lines
      run
      to the compound, the shops and the San Salvador and Encantada mines. The San
      Salvador and the Encantada mines have been electrified and the main levels
      are
      wired. San Salvador and Encantada head frames and hoists have been rebuilt
      and
      upgraded. In management's opinion, the Company's properties may not be
      adequately covered by insurance. The Company has chosen not to obtain such
      insurance for the Company's properties in Mexico because it would be difficult
      to obtain and the cost of such insurance would outweigh its value. In
      management's opinion, the Company's plant and equipment are in good condition
      and well maintained.





*Cautionary
      Note to Investors*





The
      Company is an exploration stage company and does not currently have any known
      reserves and cannot be expected to have reserves unless and until a feasibility
      study is completed for the Sierra Mojada concessions that shows proven and
      probable reserves. There can be no assurance that the Company's concessions
      contain proven and probable reserves and investors may lose their entire
      investment in the Company.





Set
      forth
      in the Company's Annual Report on Form 10-KSB and in other documents we
      file with the Securities and Exchange Commission are risks and uncertainties
      that could cause actual results to differ materially from the results
      contemplated by the forward-looking statements contained in this Quarterly
      Report on Form 10-QSB.





*Results
      of Operations for the Period Ended January 31, 2006.*





Three
      months ended January 31, 2006 compared to the three months ended January 31,
      2005:





During
      the three months ended January 31, 2006, the Company realized other income
      of
      $52,038 from the sale of zinc carbonate ore from the Company's San Salvadore
      mine, in accordance with a contract with Cameron Chemicals Inc., Norfolk,
      Virginia. Costs associated with the sale of the ore totaled $93,575 the
      three-month period ended January 31, 2006. There were ore sales of $130,771
      in
      the three-month period ended January 31, 2005. General and administrative
      expenses decreased to $456,149 for the three-month period ended January 31,
      2006
      as compared to $1,309,186 for the three-month period ended January 31, 2005.
      The
      decrease is primarily due to a cessation of drilling activity on the Company's
      property, resulting in a decrease in exploration expenditures of $446,633 and
      a
      decrease in consulting and professional services of $181,966, partially offset
      by an increase in taxes and fees of $99,459. Salaries and payroll expenses
      also
      decreased by $261,715 from the three-month period ended January 31, 2005 to
      the
      three-month period ended January 31, 2006. For the three months ended January
      31, 2006, the Company experienced a loss of $467,250, or $0.02 **** per
      share, compared to a loss of $1,261,409, or $0.06 per share, during the
      comparable period in the previous year.




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Three
      months ended January 31, 2005 compared to the three months ended January 31,
      2004:




During
      the three months ended January 31, 2005, the Company realized other income
      of
      $130,771 from the sale of zinc carbonate ore from the Company's San Salvadore Mine located
      on the property, in accordance with a contract with Cameron Chemicals Inc.,
      Norfolk, Virginia. Costs associated with the sale of the ore totaled $97,962
      for
      the three-month period ended January 31, 2005. There were ore sales of $161,006
      in the three-month period ended January 31, 2004. General and administrative
      expenses increased to $1,309,186 for the three-month period ended January 31,
      2005 as compared to $377,701 for the three-month period ended January 31, 2004.
      The increase is primarily due to an increase in exploration expenditures of
      $454,268, an increase in consulting and professional services of $179,885,
      and
      an increase of $232,355 in payroll and related expenses. For the three months
      ended January 31, 2005, the Company experienced a loss of $1,261,409, or $0.06
      per share, compared to a loss of $268,493, or $0.02 per share during the
      comparable period in the previous year.




*Liquidity
        and Capital Resources.*





The
      Company financed its obligations during the fiscal year ended October 31, 2005
      by the sale of 7,580,150 shares of its common stock during the previous fiscal
      year at an average price of $1.00 per share, less issuance costs of $698,863,
      and the sale of 476,404 shares of common stock during the year ended October
      31,
      2005 at an average price of $0.98 per share. During the three months ended
      January 31, 2006 the Company sold 7,076,500 shares in private placement
      transactions at a price of $0.80 per share. Due to the Company's substantial
      losses and mineral revenues, the Company's independent certified public
      accountants included a paragraph in the Company's 2005 financial statements
      relative to a going concerning uncertainty.





The
      Company's management believes that private placements of its shares have
      provided sufficient cash for the Company to continue to operate based on current
      expense projections.





*Cash
      flows for the three months ended January 31, 2006 were as
      follows:*





During
      the three-month period ended January 31, 2006, the Company's cash position
      increased by $5,240,350, due to the sale of 7,076,500 shares of the Company's
      common stock at a price of $0.80 per share. Also during this period, the Company
      used $419,798 in operating activities, principally in connection with
      maintaining the property.




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*Effect
      of Recently Issued Accounting Pronouncements.*





In
      May
      2005, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 154 ("SFAS No. 154"), "Accounting Changes and Error
      Corrections." This statement requires entities that voluntarily make a change
      in
      an accounting principle to apply that change retrospectively to prior periods'
      financial statements, unless this would be impracticable. SFAS No. 154
      supersedes APB Opinion No. 20, "Accounting Changes," which previously required
      that most voluntary changes in an accounting principle be recognized by
      including in the current period's net income the cumulative effect of changing
      to the new accounting principle. SFAS No. 154 also makes a distinction between
      "retrospective application" of an accounting principle and the "restatement"
      of
      financial statements to reflect the correction of an error. SFAS No. 154 applies
      to accounting changes and error corrections that are made in fiscal years
      beginning after December 15, 2005. Management believes the adoption of this
      statement will not have an immediate material impact on the financial statements
      of the Company.





In
      March
      2005, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
      No. 47 ("FIN 47"), "Accounting for Conditional Asset Retirement Obligations."
      FIN 47 clarifies that the term "conditional asset retirement obligation," which
      as used in SFAS No. 143, "Accounting for Asset Retirement Obligations," refers
      to a legal obligation to perform an asset retirement activity in which the
      timing and (or) method of settlement are conditional on a future event that
      may
      or may not be within the control of the entity. The entity must record a
      liability for a "conditional" asset retirement obligation of the fair value
      of
      the obligation can be reasonably estimated. FIN 47 also clarifies when an entity
      would have sufficient information to reasonably estimate the fair value of
      an
      asset retirement obligation. FIN 47 is effective no later than the end of fiscal
      years ending after December 15, 2005. Management believes the adoption of this
      statement will not have an immediate material impact on the financial statements
      of the Company.





**ITEM
              3.**
            **Controls
                and Procedures.**





*Disclosure
      Controls and Procedures.*





The
      Company's principal executive officer and principal financial officer have
      evaluated the effectiveness of the Company's disclosure controls and procedures
      (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
      Act) as of the end of the period covered by this report. Based on such
      evaluation, the Company's principal executive officer and principal financial
      officer have concluded that, as of the end of such period, the Company's
      disclosure control and procedures are effective in recording, processing,
      summarizing and reporting, on a timely basis, information required to be
      disclosed by the Company in the reports that it files or submits under the
      Exchange Act.




-9-
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            to Table of Contents**
 **Index
            to Financial
            Statements**





*Changes
      in Internal Control Over Financial Reporting.*




There
      was
      no change in the Company's internal control over financial reporting that
      occurred during the fiscal quarter to which this report relates that has
      materially affected, or is reasonably likely to materially affect, the Company's
      internal control over financial reporting.





**PART
      II - OTHER INFORMATION**





**Item
              1.**
            **Legal
                Proceedings.**





The
      Company is not currently a party to any legal proceedings.





**Item
              2.**
            **Unregistered
                Sales of Equity Securities and Use of
                Proceeds.**





During
      the three months ended January 31, 2006, the Company sold 7,076,500 shares
      of
      the Company's common stock at a price of $0.80 per share. These shares were
      issued in private placement transactions without registration under the
      Securities Act in reliance upon the exemptions from the registration
      requirements provided by Section 4(2) of the Securities Act, and Rule 506 of
      Regulation D promulgated under the Securities Act.





**Item
              3.**
            **Defaults
                Upon Senior
                Securities.**





None.





**Item
              4.**
            **Submission
                of Matters to a Vote of Security
                Holders.**





None.





**Item
              5.**
            **Other
                Information.**





None.





**Item
              6.**
            **Exhibits.**





(a)
            Documents
                which are filed as a part of this report:





1.
            Financial
                Statements:
                The required financial statements are contained in pages F/S-1
                through F/S-11 of this Form 10-QSB.





2.
            Financial
                Statement Schedules:
                Financial statement schedules have been omitted as they are not applicable
                or the information is included in the Consolidated Financial Statements.





3.
            Exhibits:
                The exhibits filed as part of this report and the exhibits incorporated
                herein by reference are listed in the Exhibit Index at page
                E-1.





(b)
            See
                (a)(3) above for all exhibits filed
                herewith.





(c)
            All
                schedules are omitted as the required information is not applicable
                or the
                information is presented in the Consolidated Financial Statements
                or
                related notes.






-10-
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            to Table of Contents**
 **Index
            to Financial
            Statements**




**METALLINE
      MINING COMPANY**


**An
      Exploration Stage Company**





**January
      31, 2006**





**SIGNATURES**




In
      accordance with Section 12, 13 or 15(d) of the Securities Exchange Act of 1934,
      the registrant has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.




**METALLINE
                MINING COMPANY**Date: March
                17, 2006
              By:
              /s/ MERLIN
                D.
                BINGHAMMerlin
                D. Bingham, its President
  Date: March
                17, 2006
              By:
              /s/ WAYNE
                L.
                SCHOONMAKERWayne
                L.
                Schoonmaker, its Principal Financial
                Officer







-11-
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            to Table of Contents**
 **Index
            to Financial
            Statements**





**EXHIBIT
      INDEX**








3.1
            Articles
                of Incorporation of the registrant. Filed as an exhibit to the
                registrant's registration statement on Form 10-SB (Commission File
                No.
                000-27667) and incorporated by reference
                herein.





3.2
            Bylaws
                of registrant. Filed as an exhibit to the registrant's current report
                on
                Form 8-K on September 14, 2005 and incorporated by reference
                herein.





3.3
            Articles
                of Amendment to the Articles of Incorporation. Filed as an exhibit
                to the
                registrant's registration statement on Form 10-SB and incorporated
                by
                reference herein.





4.1
            Reference
                is made to Exhibits 3.1, 3.2 and
                3.3.





31.1
            Certification
                of Principal Executive Officer pursuant to Rule 13a-14(a) of the
                Exchange
                Act. Filed herewith.





31.2
            Certification
                of Principal Financial Officer pursuant to Rule 13a-14(a) of the
                Exchange
                Act. Filed herewith.





32.1
            Certification
                of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
                Furnished herewith.





32.2
            Certification
                of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
                Furnished herewith.





99.1
            Sierra
                Mojada location map. Filed
                herewith.






-12-
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 **Index
            to Financial
            Statements**




**METALLINE
      MINING COMPANY**





**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**





PAGEConsolidated
                Financial Statements:Consolidated
                Balance Sheets as of January 31,
                2006
            F/S-2Consolidated
                Statements of Operations for the three-month
                periods ended January 31, 2006 and January 31, 2005 and for the period
                from inception (November 8, 1993) to January 31, 2006
            F/S-3Consolidated
                Statements of Cash Flow for the three-month
                periods ended January 31, 2006 and January 31, 2005, and for the
                period
                from inception (November 8, 1993) to January 31, 2006
            F/S-4Condensed
                Notes to Consolidated Financial
                Statements
            F/S-5













[The
      balance of this page has been intentionally left blank.]




F/S
          1
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**METALLINE
        MINING COMPANY**
 **(AN
        EXPLORATION STAGE COMPANY)**
 **CONSOLIDATED
        BALANCE SHEETS**
 January
                  31,
                2006
                  (unaudited)
              
              October
                  31,
                2005ASSETSCURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              5,453,719
              
              $
              213,369Accounts
                  receivable
              
              
              44,793
              
              
              23,620Prepaid
                  expenses
              
              
              57,107
              
              
              13,242Employee
                  advances
              
              
              11,560
              
              
              9,560Total
                  Current Assets
              
              
              5,567,179
              
              
              259,791PROPERTY
                  CONCESSIONSSierra
                  Mojada, Mojada 3
              
              
              15,875
              
              
              15,875Fortuna
              
              
              76,725
              
              
              76,725Esmeralda
              
              
              255,647
              
              
              255,647Esmeralda
                  I
              
              
              180,988
              
              
              180,988U.M.
                  Nortenos, Vulcano
              
              
              3,682,772
              
              
              3,682,772La
                  Blanca
              
              
              122,760
              
              
              122,760Total
                  Property Concessions
              
              
              4,334,767
              
              
              4,334,767EQUIPMENTOffice
                  and mining equipment, net
              
              
              470,284
              
              
              490,884Total
                  Equipment
              
              
              470,284
              
              
              490,884TOTAL
                  ASSETS
              
              $
              10,372,230
              
              $
              5,085,442LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              84,161
              
              $
              86,189Accrued
                  liabilities and expenses
              
              
              290,837
              
              
              189,046Other
                  liabilities
              
              
              10,000
              
              
              15,873Note
                  payable, current portion
              
              
              4,209
              
              
              4,209Total
                  Current Liabilities
              
              
              389,207
              
              
              295,317LONG-TERM
                  LIABILITIESNote
                  payable, net of current portion
              
              
              6,313
              
              
              7,365COMMITMENTS
                  AND CONTINGENCIESSTOCKHOLDERS'
                  EQUITYPreferred
                  stock, $0.01 par value; 1,000,000 shares authorized,no
                  shares outstanding
              
              
              —
              
              
              —Common
                  stock, $0.01 par value; 50,000,000 shares authorized,27,481,085
                  and 20,404,585 shares issued and outstanding, respectively
              
              
              274,812
              
              
              204,047Additional
                  paid-in capital
              
              
              23,367,276
              
              
              19,852,673Stock
                  options and warrants
              
              
              3,423,671
              
              
              1,347,839Deficit
                  accumulated during exploration stage
              
              
              (17,089,049
              )
              
              (16,621,799
              )Total
                  Stockholders' Equity
              
              
              9,976,710
              
              
              4,782,760TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              10,372,230
              
              $
              5,085,442
 The
        accompanying condensed notes are an integral part of these consolidated
        financial statements.


F/S
          2
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            to Table of Contents**
 **Index
            to Financial
            Statements**





**METALLINE
        MINING COMPANY**
 **(AN
        EXPLORATION STAGE COMPANY)**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 November
                  8,1993(Inception)Three
                  Months Ended
              
              toJanuary
                  31,
              
              January
                  31,
              
              January
                  31,2006
              
              2005
              
              2006(unaudited)
              
              (unaudited)
              
              (unaudited)REVENUES
              
              $
              —
              
              $
              —
              
              $
              —GENERAL
                  AND ADMINISTRATIVE EXPENSESSalaries
                  and payroll expenses
              
              
              130,696
              
              
              392,411
              
              
              3,368,313Office
                  and administrative expenses
              
              
              50,873
              
              
              65,561
              
              
              1,039,819Taxes
                  and fees
              
              
              119,542
              
              
              20,083
              
              
              608,983Professional
                  services
              
              
              106,351
              
              
              288,317
              
              
              4,474,023Property
                  expenses
              
              
              9,935
              
              
              56,880
              
              
              1,954,038Depreciation
              
              
              20,600
              
              
              21,149
              
              
              362,490Exploration
                  and research
              
              
              18,152
              
              
              464,785
              
              
              5,352,238TOTAL
                  GENERAL AND ADMINISTRATIVE EXPENSES
              
              
              456,149
              
              
              1,309,186
              
              
              17,159,903LOSS
                  FROM OPERATIONS
              
              
              (456,149
              )
              
              (1,309,186
              )
              
              (17,159,903
              )OTHER
                  INCOME (EXPENSES)Miscellaneous
                  ore sales, net of expenses
              
              
              (41,537
              )
              
              32,808
              
              
              123,601VAT
                  tax refunds
              
              
              13,045
              
              
              —
              
              
              132,660Miscellaneous
                  income
              
              
              —
              
              
              —
              
              
              8,500Interest
                  and investment income
              
              
              17,726
              
              
              15,121
              
              
              93,199Interest
                  and financing expense
              
              
              (335
              )
              
              (152
              )
              
              (287,106
              )TOTAL
                  OTHER INCOME
              
              
              (11,101
              )
              
              47,777
              
              
              70,854LOSS
                  BEFORE INCOME TAXES
              
              
              (467,250
              )
              
              (1,261,409
              )
              
              (17,089,049
              )INCOME
                  TAXES
              
              
              —
              
              
              —
              
              
              —NET
                  LOSS
              
              $
              (467,250
              )
              $
              (1,261,409
              )
              $
              (17,089,049
              )BASIC
                  AND DILUTED NET LOSS PER COMMON SHARE
              
              $
              (0.02
              )
              $
              (0.06
              )BASIC
                  AND DILUTED
                WEIGHTED
                  AVERAGE NUMBER
                OF
                  COMMON SHARES OUTSTANDING
              
              
              21,810,960
              
              
              19,829,081
 See
        condensed notes to the consolidated financial statements


F/S
          3
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**
  **METALLINE
          MINING COMPANY**
 **(AN
          EXPLORATION STAGE COMPANY)**
 **CONSOLIDATED
          STATEMENTS OF CASH FLOWS**
 Period
                    fromNovember
                    8, 1993(Inception)Years
                    Ended
                
                toJanuary
                    31,
                
                January
                    31,
                
                January
                    31,2006
                
                2005
                
                2006CASH
                    FLOWS FROM OPERATING ACTIVITIES:Net
                    loss
                
                $
                (467,250
                )
                $
                (1,261,409
                )
                $
                (17,089,049
                )Adjustments
                    to reconcile net loss to net cash used by operating
                    activities:Depreciation
                
                
                20,600
                
                
                21,149
                
                
                362,520Noncash
                    expenses
                
                
                —
                
                
                —
                
                
                126,864Common
                    stock issued for services
                
                
                —
                
                
                —
                
                
                966,538Common
                    stock issued for compensation
                
                
                
                
                
                176,772
                
                
                820,231Stock
                    options issued for services
                
                
                —
                
                
                —
                
                
                801,892Stock
                    options issued for financing fees
                
                
                —
                
                
                —
                
                
                276,000Common
                    stock issued for payment of expenses
                
                
                —
                
                
                —
                
                
                326,527Stock
                    warrants issued for services
                
                
                —
                
                
                —
                
                
                688,771(Increase)
                    decrease in:Marketable
                    securities
                
                
                
                
                
                250,000
                
                
                —Accounts
                    receivable
                
                
                (21,173
                )
                
                (60,402
                )
                
                (44,793
                )Prepaid
                    expenses
                
                
                (43,865
                )
                
                (48,318
                )
                
                (57,107
                )Employee
                    advances
                
                
                (2,000
                )
                
                (5,000
                )
                
                (11,560
                )Increase
                    (decrease) in:Accounts
                    payable
                
                
                (2,028
                )
                
                (52,292
                )
                
                84,160Contracts
                    payable
                
                
                —
                
                
                34,765
                
                
                4,209Accrued
                    liabilities and expenses
                
                
                95,918
                
                
                (51,578
                )
                
                316,621Net
                    cash used by operating activities
                
                
                (419,798
                )
                
                (996,313
                )
                
                (12,428,176
                )CASH
                    FLOWS FROM INVESTING ACTIVITIES:Purchase
                    of investments
                
                
                —
                
                
                —
                
                
                (484,447
                )Proceeds
                    from investments
                
                
                —
                
                
                —
                
                
                484,447Equipment
                    purchases
                
                
                —
                
                
                (7,598
                )
                
                (792,781
                )Mining
                    property acquisitions
                
                
                —
                
                
                —
                
                
                (4,452,631
                )Net
                    cash used by investing activities
                
                
                —
                
                
                (7,598
                )
                
                (5,245,412
                )CASH
                    FLOWS FROM FINANCING ACTIVITIES:Proceeds
                    from sales of common stock
                
                
                5,661,200
                
                
                —
                
                
                22,031,387Proceeds
                    from sales of options and warrants
                
                
                —
                
                
                —
                
                
                949,890Deposits
                    for sale of stock
                
                
                —
                
                
                —
                
                
                125,500Proceeds
                    from shareholder loans
                
                
                —
                
                
                —
                
                
                30,000Payment
                    of note payable
                
                
                (1,052
                )
                
                (1,052
                )
                
                (9,470
                )Net
                    cash provided by financing activities:
                
                
                5,660,148
                
                
                (1,052
                )
                
                23,127,307Net
                    increase (decrease) in cash and cash
                    equivalents
                
                
                5,240,350
                
                
                (1,004,963
                )
                
                5,453,719Cash
                    and cash equivalents beginning of period
                
                
                213,369
                
                
                1,384,030
                
                
                —Cash
                    and cash equivalents end of period
                
                $
                5,453,719
                
                $
                379,067
                
                $
                5,453,719SUPPLEMENTAL
                    CASH FLOW DISCLOSURES:Income
                    taxes paid
                
                $
                —
                
                $
                —
                
                $
                —Interest
                    paid
                
                $
                335
                
                $
                152
                
                $
                287,106NON-CASH
                    INVESTING AND FINANCING ACTIVITIES:Common
                    stock issued for services
                
                $
                —
                
                $
                —
                
                $
                966,538Common
                    stock issued for compensation
                
                $
                —
                
                $
                176,772
                
                $
                820,231Common
                    stock issued for payment of expenses
                
                $
                —
                
                $
                —
                
                $
                326,527Common
                    stock issued for equipment
                
                $
                —
                
                $
                —
                
                $
                25,000Common
                    stock options issued for financing fees
                
                $
                —
                
                $
                —
                
                $
                276,000Options
                    issued for services
                
                $
                —
                
                $
                —
                
                $
                801,892Warrants
                    issued for services
                
                $
                —
                
                $
                —
                
                $
                688,771Noncash
                    expenses
                
                $
                —
                
                $
                —
                
                $
                126,864
 The
          accompanying condensed notes are an integral part of these consolidated
          financial statements.


F/S
          4
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**





**METALLINE
      MINING COMPANY**


**(AN
      EXPLORATION STAGE COMPANY)**


**CONDENSED
      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**


**JANUARY
      31, 2006**





**NOTE
      1 - ORGANIZATION AND DESCRIPTION OF BUSINESS**





Metalline
      Mining Company ("the Company") was incorporated in the State of Nevada on
      November 8, 1993 as the Cadgie Company for the purpose of acquiring and
      developing mineral concessions. The Cadgie Company was a spin-off from its
      predecessor, Precious Metal Mines, Inc. On June 28, 1996, at a special directors
      meeting, the Company's name was changed to Metalline Mining Company. The
      Company's fiscal year-end is October 31.





The
      Company expects to engage in the business of mining. The Company currently
      owns
      concessions located in a mining region known as the Sierra Mojada District
      that
      is located in the municipality of Sierra Mojada, Coahuila, Mexico. The Company
      conducts its operations in Mexico through its wholly owned subsidiary
      corporation, Minera Metalin S.A. de C.V. ("Minera Metalin").





**NOTE
      2 - BASIS OF PRESENTATION**





The
      foregoing unaudited interim financial statements have been prepared in
      accordance with generally accepted accounting principles for interim financial
      information and with the instructions to Form 10-QSB and Regulation S-B as
      promulgated by the Securities and Exchange Commission ("SEC"). Accordingly,
      these financial statements do not include all of the disclosures required by
      generally accepted accounting principles in the United States of America for
      complete financial statements. These unaudited interim financial statements
      should be read in conjunction with the audited financial statements for the
      year
      ended October 31, 2005. In the opinion of management, the unaudited interim
      financial statements furnished herein include all adjustments, all of which
      are
      of a normal recurring nature, necessary for a fair statement of the results
      for
      the interim period presented.





The
      preparation of financial statements in accordance with generally accepted
      accounting principles in the United States of America requires the use of
      estimates and assumptions that affect the reported amounts of assets and
      liabilities, disclosure of contingent assets and liabilities known to exist
      as
      of the date the financial statements are published, and the reported amounts
      of
      revenues and expenses during the reporting period. Uncertainties with respect
      to
      such estimates and assumptions are inherent in the preparation of the Company's
      financial statements; accordingly, it is possible that the actual results could
      differ from these estimates and assumptions and could have a material effect
      on
      the reported amounts of the Company's financial position and results of
      operations.





Operating
      results for the three-month period ended January 31, 2006 are not necessarily
      indicative of the results that may be expected for the year ending October
      31,
      2006.




F/S
          5
 **Back
            to Table of Contents**
 **Index
            to Financial
            Statements**




METALLINE
        MINING COMPANY
 (AN
        EXPLORATION STAGE COMPANY)
 CONDENSED
        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 **JANUARY
        31, 2006**
  Going
        Concern


As
      shown
      in the accompanying financial statements, the Company has no revenues, has
      incurred a net loss of $467,250 for the three months ended January 31, 2006
      and
      has an accumulated deficit of $17,089,049. These factors indicate that the
      Company may be unable to continue in existence. The financial statements do
      not
      include any adjustments related to the recoverability and classification of
      recorded assets, or the amounts and classification of liabilities that might
      be
      necessary in the event the Company cannot continue in existence.





The
      Company's management believes that private placements of its shares have
      provided sufficient cash for the Company to continue to operate based on current
      expense projections.





**NOTE
      3 - RECENT ACCOUNTING PRONOUNCEMENTS**





In
      May
      2005, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 154 ("SFAS No. 154"), "Accounting Changes and Error
      Corrections." This statement requires entities that voluntarily make a change
      in
      an accounting principle to apply that change retrospectively to prior periods'
      financial statements, unless this would be impracticable. SFAS No. 154
      supersedes APB Opinion No. 20, "Accounting Changes," which previously required
      that most voluntary changes in an accounting principle be recognized by
      including in the current period's net income the cumulative effect of changing
      to the new accounting principle. SFAS No. 154 also makes a distinction between
      "retrospective application" of an accounting principle and the "restatement"
      of
      financial statements to reflect the correction of an error. SFAS No. 154 applies
      to accounting changes and error corrections that are made in fiscal years
      beginning after December 15, 2005. Management believes the adoption of this
      statement will not have an immediate material impact on the financial statements
      of the Company.





In
      March
      2005, the Financial Accounting Standards Board ("FASB") issued FASB
      Interpretation No. 47 ("FIN 47"), "Accounting for Conditional Asset Retirement
      Obligations." FIN 47 clarifies that the term "conditional asset retirement
      obligation," which as used in SFAS No. 143, "Accounting for Asset Retirement
      Obligations," refers to a legal obligation to perform an asset retirement
      activity in which the timing and (or) method of settlement are conditional
      on a
      future event that may or may not be within the control of the entity. The entity
      must record a liability for a "conditional" asset retirement obligation if
      the
      fair value of the obligation can be reasonably estimated. FIN 47 also clarifies
      when an entity would have sufficient information to reasonably estimate the
      fair
      value of an asset retirement obligation. FIN 47 is effective no later than
      the
      end of fiscal years ending after December 15, 2005. Management believes the
      adoption of this statement will not have an immediate material impact on the
      financial statements of the Company.




F/S
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**METALLINE
        MINING COMPANY**
 **(AN
        EXPLORATION STAGE COMPANY)**
 **CONDENSED
        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
        31, 2006**


**NOTE
      4 - CONCESSIONS IN THE SIERRA MOJADA DISTRICT**





Sierra
      Mojada Mining Concessions


During
      the period of August 23, 1996 to July 18, 2000, the Company executed six
      separate agreements for the acquisition of eight concessions in the mining
      region known as the Sierra Mojada District located in Sierra Mojada, Coahuila,
      Mexico. Each agreement enabled the Company to explore the underlying concession
      in consideration for the payment of stipulated annual payments. Each of the
      concession agreements included an option to purchase the concession and the
      annual payments, which were applied in full toward the contracted purchase
      price
      of the related concession.





The
      Company subsequently completed the purchase of the eight concessions, as
      follows: Esmeralda, consisting of approximately 118 hectares, on March 20,
      1997;
      Fortuna, consisting of approximately 14 hectares, on December 8, 1999; Sierra
      Mojada and Mojada 3, consisting of approximately 4,767 and 1,689 hectares,
      respectively, on May 30, 2000; Unificacion Mineros Nortenos and Vulcano,
      consisting of approximately 337 and 4 hectares, respectively, on August 30,
      2000; Esmeralda I, consisting of approximately 98 hectares, on August 20, 2001;
      and La Blanca, consisting of approximately 34 hectares, on August 20, 2001.
      The
      Company has recorded the concessions at acquisition cost.





All
      of
      the concessions were acquired by purchase agreements with Mexican entities
      and/or Mexican individuals and all of the concessions were paid for in cash.
      In
      the acquisition of Sierra Mojada and Mojada 3 there was one purchase agreement
      for both concessions. Also, in the acquisition of Unificacion Mineros Nortenos
      and Vulcano, there was one purchase agreement for both concessions.





Because
      all eight concessions are located in the same mining region and in close
      proximity to one another, the concessions are routinely treated as one major
      prospect area and are collectively referred to as the Sierra Mojada Project.
      The
      primary work performed on the Company's concessions has consisted of geologic
      mapping, sampling, and drilling. This work has resulted in establishing the
      presence of mineralized material (zinc) of sufficient quantity and grade to
      justify in the Company's opinion a feasibility study which commenced in
      2005.




F/S
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**METALLINE
        MINING COMPANY**
 **(AN
        EXPLORATION STAGE COMPANY)**
 **CONDENSED
        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
        31, 2006**
  **NOTE
      5 - PROPERTY AND EQUIPMENT**





The
      following is a summary of the Company's property and equipment at January 31,
      2006 and October 31, 2005, respectively:





January
                31,
            
            October
                31,2006
            
            2005Mining
                equipment
            
            $
            514,855
            
            $
            514,855Buildings
                and structures
            
            
            141,061
            
            
            141,061Land
                - non mineral
            
            
            15,839
            
            
            15,839Vehicles
            
            
            42,068
            
            
            42,068Computer
                equipment
            
            
            88,787
            
            
            88,787Office
                equipment
            
            
            4,183
            
            
            4,183Furniture
                and fixtures
            
            
            8,185
            
            
            8,185814,978
            
            
            814,978Less:
                Accumulated depreciation
            
            
            (344,694
            )
            
            (324,094
            )$
            470,284
            
            $
            490,884





**NOTE
      6 - CAPITAL STOCK**





Preferred
      Stock


At
      its
      March 1, 2001 annual shareholders meeting, the Company approved a change to
      its
      articles of incorporation whereby the Company is authorized to issue 1,000,000
      shares of $0.01 par value preferred stock. The specific features of the
      preferred stock are to be determined by the Company's board of directors. At
      January 31, 2006, there were no shares of preferred stock issued or
      outstanding.





Common
      Stock


In
      March
      2005, the Company's board of directors authorized a private placement of up
      to
      5,333,334 shares of the Company's restricted common stock at a price of $1.125
      per share for total proceeds of $6,000,000. Purchasers of these shares also
      received a warrant to purchase one share of the Company's common stock at an
      exercise price of $2.00 per share with an exercise period of five years. In
      September 2005, a modification of the private placement terms was authorized.
      The modified terms allow for the issuance of 7,500,000 shares of common stock
      at
      a price of $0.80 per share, a warrant exercise price of $1.25 per share and
      an
      exercise period of five years. During the three months ended January 31, 2006,
      the Company issued 7,076,500 shares of common stock under the aforementioned
      private placement, for cash consideration at $0.80 per share with attached
      warrants valued at an average of $0.29 per share.




F/S
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METALLINE
        MINING COMPANY
 (AN
        EXPLORATION STAGE COMPANY)
 CONDENSED
        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 **JANUARY
        31, 2006**
  During
      the year ended October, 2005 the Company issued 476,404 shares of common stock
      as part of the private placement offering, for cash consideration of an average
      of $0.98 per share with attached warrants valued at an average of $0.28 per
      share.





Stock
      Options


On
      March
      1, 2001, the Company's shareholders approved a qualified stock option plan.
      The
      number of shares eligible for issuance under the qualified plan is to be
      determined by the Company's board of directors. As of January 31, 2006, there
      were 670,000 options outstanding and exercisable. Of this amount, 250,000 were
      granted to officers and directors of the Company.





Summarized
      information regarding stock options outstanding and exercisable at January
      31,
      2006 is as follows:





Options
                Outstanding
            
            Options
                ExercisableExercise
              Price
            
            Number
              Outstanding
            
            Weighted
                Average Remaining Contractual Life (Years)
            
            Weighted
                Average Exercise Price
            
            Number
              Exercisable
            
            Weighted
                Average Exercise Price$1.25
            
            
            100,000
            
            
            3.52
            
            $
            1.25
            
            
            100,000
            
            $
            1.251.32
            
            
            370,000
            
            
            0.67
            
            
            1.32
            
            
            370,000
            
            
            1.322.15
            
            
            200,000
            
            
            4.08
            
            
            2.15
            
            
            200,000
            
            
            2.15$1.25-2.15
            
            
            670,000
            
            
            2.12
            
            $
            1.60
            
            
            670,000
            
            $
            1.56





Warrants


During
      the three months ended January 31, 2006, the Company issued 7,076,500 common
      stock warrants, exercisable at $1.25 per share. The value allocated to these
      warrants was $2,075,832.





**NOTE
      7 - INCOME TAXES**





At
      January 31, 2006, the Company had net deferred tax assets calculated at an
      expected rate of 34% of approximately $4,773,000, principally arising from
      net
      operating loss carryforwards for income tax purposes. As management of the
      Company cannot determine that it is more likely than not that the Company will
      realize the benefit of the net deferred tax asset, there is a valuation
      allowance equal to the net deferred tax asset.




F/S
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METALLINE
        MINING COMPANY
 (AN
        EXPLORATION STAGE COMPANY)
 CONDENSED
        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 **JANUARY
        31, 2006**


The
      significant components of the deferred tax assets at January 31, 2006 and
      October 31, 2005 are as follows:





January
                31,
            
            October
                31,2006
            
            2005Net
                operating loss carryforward
            
            $
            14,039,000
            
            $
            13,572,000Deferred
                tax asset
            
            $
            4,773,000
            
            $
            4,614,000Deferred
                tax asset valuation allowance
            
            $
            (4,773,000
            )
            $
            (4,614,000
            )




As
      of
      January 31, 2006, the Company had net operating loss carryforwards of
      approximately $14,039,000, which expire in the years 2008 through 2026. The
      Company has recognized approximately $1,491,000 of losses from the issuance
      of
      stock options and warrants for services through fiscal 2005, which were not
      deductible for tax purposes. The change in the allowance account from October
      31, 2005 to January 31, 2006 was $159,000. The Company has immaterial temporary
      differences resulting from differences in tax depreciation of
      equipment.




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